The Bank suggested its next move is just as likely to be a rate cut as a rate hike.

It said the risk of falling inflation “has grown in importance” and that inflation won’t rise back to its target for “about two years” (suggesting even less chance of a prime rate increase through 2015).

Even if inflation does return to its 2% target, that alone isn’t enough reason for the Bank to raise rates.

So essentially, it’s Pleasantville right now for variable-rate borrowers, with no hikes in sight.

In terms of what it would take for the BoC to actually lower rates, it would likely need at least 2-3 more months of weak economic data (be it falling exports, business investment, inflation or employment).

Fixed income traders believe that could happen. They’re now betting more heavily on a rate cut by October than a rate hike or no change combined. That reflects a key change in market-wide rate expectations over the last month.

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Economists, as is often the case, have a different opinion. Those polled by Reuters expect the next rate move to be an increase in mid-2015. (Source: Globe and Mail)